State of the sector 2011

State of the Sector 2011

March 2012

Tel: 020 7426 8888
Email: Michele.Madden@nfpsynergy.net
Web: www.nfpsynergy.net

Background

• Research completed in partnership with Third Sector magazine

• Third phase of the research

• Over 600 respondents from a variety of organisations

• Fieldwork - November 2011

2

Profile of respondents

• Mixture of levels of role; CEO, trustees, senior manager, department
or team manager, project worker

• A quarter described their main area of expertise as fundraising, the
remainder a mix of other areas e.g. operations, brand, management

• 5% of respondents said their organisation had no employees, and
over a third had between 1 and 25 employees

• In terms of turnover over a third of organisations had a turnover of
less that £1 million

3

The impact of the recession and economic turmoil
Not sure/Don't know Not relevant to us Decreased a lot Decreased a bit About the same Increased a bit Increased a lot

Level of services provided -4%-6% -16% 32% 13%

Overall income -2% -22% -26% 23% 7%

Number of people employed -3% -13% -23% 24% 6%

Income from donations -20% -9% -23% 18% 4%

Income from central 6%
-44% -19% -11% 3%
government

Income from local
-44% -18% -15% 3% 1%
government

-80% -60% -40% -20% 0% 20% 40% 60% 80%

Q1: “The recession and economic downturn have had an impact on the third sector in a range of ways. Please indicate
how the income, services and staff of your organisation have been affected in the last two years.” Ranked by
increased a bit/increased a lot

Base=695
4 State of the Sector Survey, 2011, nfpSynergy

The impact of the recession and economic turmoil

Yes No Don't know/not sure
92%

69% 70%

58%
48% 48%

37%

25% 23%

6% 5% 7%
4% 4% 4%

Are you looking at Has the recession Have you had to Has it prompted Has it prompted
partnerships with prompted you to deliver different your organisation your organisation
other alter your services or to consider to merge?
organisations structure or change your merger?
more than downsize? mission?
before?

Q2. How has your organisation responded to the pressures of the last two years?

Base= 692.

The impact of government initiatives and funding
Don't know Strongly disagree Disagree Neither agree nor disagree Agree Strongly agree

The public sector cuts
affecting the sector would
-3% -23% 42% 8%
have been made by a Labour
government as well.

The Big Society agenda offers
new opportunities for the -18% -26% 28% 3%
sector.

The coalition government will
be better for the sector than
-25% -28% 9% 3%
another Labour government
would have been.

The coalition government will
be better for your charity than
-24% -26% 9% 2%
another Labour government
would have been.

-80% -60% -40% -20% 0% 20% 40% 60% 80%

Q3: Eighteen months after the election, we are interested in your views on the coalition government and its impact on
the sector and your charity. Please indicate how much you agree or disagree with each of the statements below.
Ranked by Agree/Strongly agree

Base=607

Government initiatives – perceived impact (part 1)
Don't know Too early to tell Significant impact for the worse
Slight impact for the worse No impact Slight impact for the better
Significant impact for the better

Gift Aid claims of up to £5000 without declarations 12% 10% 31% 35% 10%

Inheritance tax concessions for making 10 per cent legacies 14% 21% 39% 20% 3%

The Giving White Paper 26% 27% 32% 12% 1%

The Transition Fund 26% 10% 51% 8% 3%

Transforming Local Infrastructure 25% 18% 6% 38% 7% 2%

Social Action Fund 29% 18% 42% 8% 1%

Social Impact Bonds 29% 18% 2% 42% 7% 1%

Q4: ‘Please tell us which government initiatives relating specifically to the third sector you think either have had, or will
have, the biggest impact on your charity.’ Ranked by slight impact/significant impact for the better

Base = 580

Government initiatives – perceived impact (part 2)
Don't know Too early to tell Significant impact for the worse
Slight impact for the worse No impact Slight impact for the better
Significant impact for the better

Big Society Capital 26% 19% 2% 43% 7% 1%

The Innovation in Giving 31% 41% 8%
18% 0%
Fund

Community First 35% 11% 43% 7% 0%

Big Society Deregulation
29% 18% 42% 6% 1%
Taskforce

Community organisers 27% 16% 44% 6% 1%

National Citizen Service 23% 13% 4% 51% 6% 1%

Compact revision 32% 13% 47% 3% 1%

Mutuals Taskforce 38% 10% 2% 47% 2%

Q4: ‘Please tell us which government initiatives relating specifically to the third sector you think either have had, or will
have, the biggest impact on your charity.’ Ranked by slight impact/significant impact for the better

Base = 580

What government initiative or policy change would
you like to see that would make a positive
difference to your organisation?
• Very varied responses

• Many made reference to specific government initiatives or policies
that they wished to change (based on the purpose of their
organisation)

o Local government and their relations with small charities (particularly
around contracting)
o VAT
o Gift Aid
o Bureaucracy and red tape
o Tax incentives/relief
o NHS reforms

9

The changing regulatory landscape and the
independence of the sector

The Charity Commission fulfils its regulatory role in a
-19% 48% 2%
proportionate, helpful and appropriate way

It makes sense that STREET fundraising is regulated by the
-32% 39% 9%
FRSB and the PFRA

HM Revenue and Customs administers Gift Aid in a
-23% 36% 2%
proportionate, helpful and appropriate way
The Fundraising Standards Board (FRSB) fulfils its self-
regulatory role in a proportionate, helpful and appropriate -44% 26% 1%
way
The Charity Commission has responded effectively and
-41% 21% 1%
strategically to its cut in funding
The Public Fundraising Regulatory Association (PFRA) fulfils
its self-regulatory role in a proportionate, helpful and -57% 16%
appropriate way
The cut of a quarter in the Charity Commission’s budget will
-16% -48% 12% 2%
not weaken its regulatory functions

-80% -60% -40% -20% 0% 20% 40% 60% 80%

Q7: These questions are about the sector’s regulators, their remit and their performance. Please indicate how much
you agree or disagree with each of the statements. Ranked by agree/strongly agree

Base=551

The changing regulatory landscape and the
independence of the sector

My charity has the independence and freedom to speak out
-9% 46% 27%
freely on the issues that concern it

My charity has independence in terms of funding -18% 36% 22%

The independence of charities is compromised by the shift
-22% 41% 14%
from grants to contracts

Payment by results is a threat to the independence of
-4% -23% 41% 12%
charities

The independence of charities is compromised if they deliver
-7% -28% 41% 7%
public services

The sector’s independence is in excellent health -8% -42% 22% 1%

The sector’s independence is healthier than it was two years
-10% -39% 13% 1%
ago

-80% -60% -40% -20% 0% 20% 40% 60% 80%

Q8: Alongside regulation comes the independence of the sector and individual charities. So please indicate how much
you agree or disagree with each of the statements below. Ranked by agree/strongly agree

Base=553

The big issues for your organisation (part 1)

The public doesn't understand
-3% 57% 29%
how modern charities work

What it means to be a charity is
-17% 57% 11%
increasingly blurred

There is too much competition
between charities, especially -21% 47% 13%
the large ones

I think the sector is too cautious 46%
-2% -18% 12%
about campaigning

The governance of charities is
-1% -21% 44% 12%
fraught with difficulties

I think charities are usually able
to deliver better public services -2%-13% 39% 8%
than government

Sector infrastructure bodies -9% 13%
-1% 33%
need a radical rethink

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100%

Q9: There is a range of big issues facing the sector. Please indicate how much you agree or disagree with each of the
statements below. Ranked by agree/strongly agree

Base=529

The big issues for your organisation (part 2)

I am in favour of more delivery of
-6% -22% 38% 8%
public services by charities

I think government is exerting too
-17% 37% 8%
much control over the sector

I think the need for impact
measurement by charities is being -32% 34% 5%
over-emphasised

Every charity should be able to
make its own decision about -33% 33% 6%
whether it wants to pay its trustees

The big cuts to the government’s
Strategic Partners programme were -2% -7% 27% 8%
a mistake

I think very big charities have a
negative effect on the sector as a -10% -29% 23% 12%
whole

Existing infrastructure bodies
serving the sector fulfill their -5% -20% 23% 4%
purpose well

I think the abolition of the sector
infrastructure body Capacity -6% -12% 21% 5%
builders was a mistake

-80% -60% -40% -20% 0% 20% 40% 60% 80% 100%
Q9: There is a range of big issues facing the sector. Please indicate how much you agree or disagree with each of the
statements below. Ranked by agree/strongly agree

Base=529

Biggest challenges for charities – ‘top 3’ responses
Creating a sustainable funding base 69%

Growing our voluntary income 51%
Communicating the importance of our
47%
work
Creating an effective board 28%

Securing funding from government 20%

Keeping high quality staff 18%

Dealing with red tape and bureaucracy 15%
Sorting out our back office functions (eg
13%
IT, finance, etc)
Attracting high quality staff 11%

Finding and keeping volunteers 8%

Other 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Q10. What are the three biggest challenges facing your organisation? Please tick up to three of the options below

Base- 537

Magic wand - fundraising

• Grants
o Centralised applications
o Appropriate reporting levels
o Feedback on failed applications
o Shorter applications

• Change in attitudes to giving
o General public
o Within organisations – trustees, staff

• Staff
o Not enough of them!
o Not skilled or experienced

15

Magic wand – other issues (not fundraising)

• Trustees
o “A limitless supply of capable, prudent and dedicated trustees –
preferably a high percentage also being qualified accountants”

• IT/systems

• Leadership
o “getting (a) CEO who actually understands how to run a business and
make strategic decisions”

• Administrative burden on small charities

16

Issues in the sector – Key attributes (first 8)
Most important attributes required to be a successful charity – in 2011, 2009, and in 2007

Quality of work and/or 65%
70%
services 67%

55%
Quality of leadership 56%
58%

55% * New category for 2011
Strength of values and 54% ‘Involvement of
vision 55% beneficiaries’ in 2009 (1%)

44%
Financial soundness 46%
43%
2011
Input from clients and 39% 2009
beneficiaries* 2007

Quality of trustees and 37%
31%
governance 38%

32%
Capacity to innovate 35%
34%

32%
Quality of management 32%
33%

Q13. Please choose up to five of the following attributes which you believe are most important in creating a successful charity
with a high impact on its beneficiaries.

Base=532 (in 2011).

Issues in the sector – Key attributes (next 8)
Most important attributes required to be a successful charity – in 2011, 2009, and in 2007
29%
Quality of fundraising and/or marketing 28%
26%

22%
Ability to work in partnership 40%
30%

19% * New category for 2011.
Management of brand, image and reputation 18% ‘Involvement of
15% beneficiaries’ in 2009 (1%)

18%
Ability to attract, develop and retain top talent 28%
30%
2011
10% 2009
Campaigning and media/PR skills 19%
23% 2007

9%
Modern IT strategy/attitude to digital media 8%
10%

7%
Internal communications 11%
12%

6%
Strong commitment to diversity 9%
12%

Q13. Please choose up to five of the following attributes which you believe are most important in creating a successful charity
with a high impact on its beneficiaries.

Base=532 (in 2011).

Issues in the sector – Key attributes (first 8)
Skills most required/desired by respondents in their charity – in 2011, 2009, and in 2007
43%
Fundraising 42%

35%
Web/Digital Media 30%

External 33%
31%
Communications or PR

32% 2011
Marketing 32% 2009
2007
31%
Strategic planning* 34%

31%
Governance/Trustees 34%

31%
Evaluation skills* 26%

27%
Information Technology 23%

Q14 . Which five of these skills or expertise are you finding in short supply, or would ideally like to have more of, in your charity?

Base=511 (in 2011). *Answer option not included in 2007 State of the Sector questionnaire.

Issues in the sector – Key attributes (next 8)
Skills most required/desired by respondents in their charity – in 2011, 2009, and in 2007
26%
Legal expertise* 24%

23%
Leadership 24%

Internal 20%
22%
Communications

20% 2011
Campaigning 22% 2009
2007
19%
Human Resources 21%

17%
Financial management 19%

15%
Management 19%

12%
Service delivery 10%

Q14 . Which five of these skills or expertise are you finding in short supply, or would ideally like to have more of, in your charity?

Base=511 (in 2011). *Answer option not included in 2007 State of the Sector questionnaire.

Biggest concerns in the next few years
• Sustainable funding and survival
o “sustainability and ability to meet increasing demands with diminishing
resources”
o “operating may cease if funding is not obtain[ed] in the next few months!”
o “moving away from an over-dependence on statutory funding”
o “whether we can survive in a format/structure that stays true to our vision or
whether the environment will force unacceptable changes”

• Staff and Volunteers

• Governance
o “my charity desperately needs someone at the top with a vision for what
direction the charity should be going and a strategy for how to achieve that. Our
trustees are hopeless…”

21

What are the biggest challenges facing your
organisation?

22

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(e) insight@nfpsynergy.net

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23

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